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Table of Contents
........................................................................................ 2
1.0.Executive Summary.....................................................4
2.0.Introduction................................................................4
3.0.Critical Analysis of Current Situation............................4
3.1.Analysis and Issue Identification..................................4
3.1.1.The Organisation................................................................................5
3.1.1.1.The Balance Scorecard................................................................5
3.1.1.2.KPI............................................................................................... 5
3.1.2.Stakeholders...................................................................................... 7
3.1.2.1.Customers................................................................................... 7
3.1.2.2.Employees................................................................................... 8
3.1.2.3.Shareholders............................................................................... 8
3.1.2.4.Bank............................................................................................ 9
3.1.2.5.Local Government.......................................................................9
3.1.2.6.Local Community.........................................................................9
3.1.3.Sector/ Industry................................................................................11
3.1.4.Macro Environment..........................................................................11
3.1.4.1.PESTLE Analysis.........................................................................11
3.1.5.Decision Orders................................................................................12
3.1.5.1.Wicked and Tame Problems.......................................................14
3.1.5.2.Crisis Action............................................................................... 14

3.2.Issue Evaluation........................................................14
3.2.1.Categorisation and Prioritisation......................................................14
3.2.2.Root Cause Analysis.........................................................................16
3.2.3.Risk Assessment............................................................................... 16
3.2.4.SAFe Review..................................................................................... 17

4.0.Strategic Recommendations.......................................18
5.0.Reference List...........................................................20
6.0.Appendices List.........................................................22
6.1.Appendix A.......................................................................................... 22
6.2.Appendix B.......................................................................................... 23
6.3.Appendix C.......................................................................................... 24

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1.0.Executive Summary
This report identifies the complexity of issues challenging Lucky MT (LMT)
and its future to remain successful within the EMS sector. Both internal and
external analysis have identified wicked and tame issues with a range of time
horizons and a multitude of impact levels. LMTs ambition to dilute its
dependence on TeleNet and MedTech is the driving force behind many of the
issues it is currently facing. A list of proposed recommendations are justified
by the analysis of the issues and the benefit the adjustment and addressing of
the issue will bring to LMT.

2.0.Introduction
Since the end of the Joint Venture (JV) in 2002, LMT has experienced many
challenges to the company in order to establish itself as a successful
independent limited company. Opportunities to grow such as, setting up
overseas to reduce costs in the future, in comparison to present financial
issues and on going personnel challenges, is increasing pressure on LMTs
Managing Director, Johnson Pang (JP). Furthermore, external Global risks
could impact LMT; the World Economic Forum et al. (2005) report suggests
environmental concerns such as climate change has the potential for extreme
impact, geopolitical risk poses terrorism with major-to-extreme global impact,
social issues of migration are predicted to likely happen with a moderate
impact and the economic coming fiscal crisis is predicted to have a major
global impact.

3.0.Critical Analysis of Current Situation

LMT is currently facing an array of challenges; in order to understand the
issues this paper will conduct environmental scanning as defined by Albright
(2004) as the internal communication of external information about issues
that may potentially influence an organizations decision-making process.
Environmental scanning focuses on the identification of emerging-issues,
situations and potential-pitfalls that may affect an organizations future. Davis
(2013) outlines, a holistic view of an organisation and its environment
displays the big/wider picture of an organisation; application of this approach
to LMT will enable a critical overview of the organisations and the challenges
presently facing it.

3.1.Analysis and Issue Identification

In order to identify and analyse the challenges within the current situation,
Collins and Porras (1994) outline that the key to prolonged business success
is the ability and capability to align an organisations processes and adaptation
to the change in external environment; however, an organisations priorities
vary from employee-to-employee as well as shareholder-to-shareholder,
therefore problem identification can be difficult as it is dependant on particular
perspectives.

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3.1.1.The Organisation
3.1.1.1.The Balance Scorecard
In 1988, LMT was set up as a Joint Venture between MedTech and TeleNet,
ultimately to avoid the raising labour costs in USA. JP outlines LMTs values
are to provide good service rather than maximize profit (Boulton 2012: p.3).
Furthermore, LMTs vision is to be a low-volume, high-mix and high-value
service organisation, a niche company within the EMS industry. However,
since the independence of LMT the focus from being a specialised company
within its sector has changed, as establishing independence by the
introduction of new customers has taken a priority. Furthermore, the nature of
the new customers services seems to be less of a priority in comparison the
origin of LMT.
3.1.1.2.KPI

Upon analysis of Figure 1 (Boulton 2012) it is apparent LMT has a gradual

revenue increase year-on-year, however with the cost of sales increasing the
audited gross profit is decreasing and not reflecting growth in revenue and
cost of sales. As displayed in Figure 2 (Boulton 2012) a possible explanation
of this is LMT is not selling at the same price as it has done previously, as the
gross profit margin percentage has decreased year-on-year to-date
representing a lack of efficiency.
The full year forecast for 2005 is also not reflective of the 2005 Q3 (Figure 1)
as it is suggested that LMT will double its gross profit in the final quarterly, of
which has yet to be reached to-date.
Figure 2 (Boulton 2012) exhibits the working-capital ratio of which is
significantly higher than the optimum level of 2, but expresses an increase in
risk to LMT with these working-capital ratios. Moreover, Inventory days
(Figure 2) also suggest risk at LMT, as it is progressively taking longer to turn
inventory into sales resulting in obsolete inventory on hand and high
investment in inventory.

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Furthermore, the budget for 2006 is an unrealistic financial projection due to

the giant comparison between previous audited years gross profit coupled
with the recent loss of a large contract, as exhibited in Figure 2 (Boulton 2012)
Debtor days, LMT have allowed for excessive credit, which suggests possible
issues surrounding the financial position of a major customer/s.

Figure 1 (Boulton 2012) displays revenue, cost of sales and gross profit
figures including the forecast and budget alongside Figure 3 (Boulton 2012).
Both figures display the linear forecast trend-line for both charts; upon
analysis Figure 1s (Boulton 2012) forecast trend-line suggests a gross profit
of less than US$20,000 in FY06, raising doubt on the given US$24,250 gross
profit budget. Similarly, Figure 3s (Boulton 2012) linear forecast trend line
suggests a US$12,000 gross profit for FY06. In conclusion, the current
projections are quixotic, preventing management to make informed decisions
about the future of LMT.

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The key performance indictors currently at LMT are failing to incorporate the
vision to short-term goals, as the long-term goal of independence has rapidly
changed to the sole short-term goal at LMT (Kaplan and Norton 1996).

3.1.2.Stakeholders
3.1.2.1.Customers
Upon analysis of Figure 4 (Boulton 2012) it is apparent LMT remains
dependant on its previous joint-venture owners totalling combined revenue of
50%. Previous to 2004, financial dependence on these two companies was a
necessity in order to maintain positive revenue. However, in 3Q 2005
MedTech has shown some serious concerns due to revenue of US$3,200
significantly lower than the expectation. It has been suggested this is due to
MedTechs latest infusion pump, which has now been postponed for a further
12 months negatively impacting the current revenue-by-customer 2006
budget.

Similarly, TeleNet have recently announced a cash flow issue resulting in

several months of outstanding invoices unpaid, and a loss of a large contract,
which will need to reflected in the projections. The loss of the Latin America
contract has resulted in financial issues as some components have been
bought without an authorised purchase order, these too will need to be
accounted for in the financial records.
LMT has successfully gained two medical customers, Jones and Miller
(J&M) and DM Schwarz both of which are valuable customers due to their
year-on-year sales growth. J&M have proposed a move to Malaysia, which is
a proposition that is being considered by LMT, in order to dilute dependence
on MedTech and TeleNet, grow, and save money in wages.
Spatiale is an aerospace large first tier supplier who joined LMT for the
production of initial trail parts. Initially, producing aerospace parts seemed like
the ideal venture for LMT as the aerospace quality award was not much more
complex than the one required for the Medical Equipment production.
Therefore, Spatiales resistant to move production from its longstanding
European supplier is a disappointment for the future of LMT. However, the

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ability to help progress this relationship may have been clouded by the other
issues LMT is facing.
Finally, LMTs most recent new customer, Erfde-Auto, has raised many
concerns within the organisation. It is the only automotive venture taken on by
LMT that has intern started to cause an issue on the production lines,
highlighted by the Operations Manager and Quality Manager. It is also a lowmargin, high-volume service customer, which directly conflicts with the lowvolume, high-mix, and high-value service of LMT, which had raised concerns
by Kang and Low early on. However, it is financially doing well with 12%
revenue in 2004 and continuing to show growth.
3.1.2.2.Employees
Bernie Chen is an outsourced VP-of- Marketing employed at the time of
independence. He is an unusual candidate for LMT as his experience is in
mid-tier EMS firms with low-value, high-volume services. However, Chen had
high salary demands that resulted in JP changing overall salary scales. Chen
won the Erfde-Auto customer contract; in order to justify the contract both
Chen and JP invested their personal reputations. Chen has also been idolised
in JP eyes for being a go-getter, a trait JP desired his other employees to
have; however, Chens trait has now resulted in a financial issue for LMT, as
he gave the instruction to the team to order the components for the TeleNet
Latin American order which has since fell through, resulting in LMT having
expensive inventory that cannot be used (Boulton 2012).
JP is the Managing Director of LMT, promoted from General Manager in the
independence of LMT. Whilst, JP has the characteristics of a good candidate
of the role of Managing Director, as he is well organised, hard working and
exhibits a systematic approach. However, he has recently been raising
doubts, for example, he was unaware of both the TeleNet financial issues and
Chens ordering of components without an authorised purchased order. He
has been consistently defending Chens decisions as well as defending the
employment of Chen, disregarding the concerns raised by other members of
the senior executive team.
Mr Ho, VP of Finance, was promoted also in the independence of LMT by JP
because of his methodical, hard working and attention to detail traits,
regardless of his lack of analytical and financial modelling ability. His ability
and position has been called into question due to the financial issues that are
facing LMT currently, which were not raised as a concern previously.
3.1.2.3.Shareholders
KS Lee, Non Executive Chairman, has inherited an advisory role to JP
originating from a previous employment colleague relationship. He raised
concerns about the general state of financial performance. It is therefore
disconcerting that these issues were not set as apart of JPs strategic
priorities/proposals (Appendix A). Furthermore, Lee informed JP of a conflict
of issue when dealing with TeleNet and Erfde-Auto due to the issues as stated
previously, another concern that was not outlined in JPs priorities/proposals.

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Another member of the Board, Melissa Tan of SEA Partners, believes the
strategic priorities/proposals produced by JP do not reflect the real issues that
LMT is facing nor is the priority of the ones listed. Her aggressive approach
places Mr Ho in question, alongside the sacking of the employee who ordered
the Latin American components, and the dismissal of any movements abroad.
In comparison, Dinesh Varma of STAR Private Equity, remains positive and
excited about the possibility of the Erfde-Auto move to India. Nevertheless,
she has also raised concerns over finances and MedTech sales fall.
Non Executive Director, Lau Su-Min is yet to comment on these on going
issues. As outlined by the Higgs Report (2003) the role of the Non Executive
Director is to, challenge and contribute to the development of strategy,
scrutinise and monitor the performance of management in order to meet
goals, should be satisfied financial information is accurate, risk management
is robust and defensible; Raising doubt on the competency of Lau Su-Min as
a Non Executive Director.
3.1.2.4.Bank
LMTs bank, SD Bank, have recently made an agreement with Mr Ho to
extend the $5m overdraft facility to $10m that was originally set up as a
precaution for short-term fluctuation in working-capital, a facility JP did not
think would be utilised. Furthermore, LMT has 2 years left on the 5 year $8m
loan. The current financial issues question the involvement of the bank in
LMTs future.
3.1.2.5.Local Government
According to the Economic Development Board the aim is to develop
Singapore into a world class electronic and precision engineering hub for
manufacturing solutions and high-value-added components, reflective of LMT
(Sector Report 2004: p.1). However, the governments decision on high
wages prevents Singapore from competing amongst other countries; resulting
in the attractiveness of moving production/part-of-production to Malaysia
and/or India.
3.1.2.6.Local Community
Furthermore, companies moving abroad due to high wages are affecting the
local community, as the result is the loss of jobs. This issue coupled with the
need for specialised trained staff is preventing locals being employed. LMTs
choice to move abroad will affect the local community negatively.

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In conclusion, a change is imminent at LMT and the stakeholders will be

impacted by this change; however, stakeholders also have power to change
and a level of interest in change as exhibited in Figure 5. The different sizes of
the circles represent the influence upon change that each stakeholder has, for
example, whilst SD Bank have mid level power of change and mid level
interest, its influence has been represented by a large circle as without its
increase in the overdraft facilities, the possibility of moving facilities abroad is
highly unlikely. The stakeholder map also highlights the complicated nature of
decision-making by JP as he is personally primarily influenced by Lee, Bernie
Chen and TeleNet and secondarily influenced by MedTech and Erfde-Auto;
resulting in complex decision-making for complex issues.

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3.1.3.Sector/ Industry

Figure 6 (Porter 1979) highlights the nature and degree of competition in the
EMS industry for LMT to remain in Singapore. Whilst new entrants get a first
mover advantage, Singapore has made it difficult for smaller EMS
organisations to remain due to a increase in wages; resulting in high
substitutions for LMTs current customers to move production from LTM to a
competitor in China for example. Subsequently leaving suppliers and buyers
with the power, evidence of this within LMT has prevailed through the
proposition from J&M and Erfde-Auto to move abroad. Porter (1979: p.144)
suggests combining the framework [Porters 5 forces] with judgement in its
application, a company may be able to spot an industry with a good future
however, it is apparent from Figure 6, the framework is not analytical and
lacks depth to the understanding of why LMT may be better positioned in
Singapore without any regard to comparison of different opportunities of
change.

3.1.4.Macro Environment
3.1.4.1.PESTLE Analysis
3.1.4.1.1.Political
Bussire and Mulder (2000: p.326) found that political and economic
variables have to be used jointly to give an accurate picture of an economy.
Therefore, the impact of Singapores 2001 sharp economic downturn and its
current political instability make for an unstable economy. As Singapores
government focuses on the current concerns regarding terrorism, the survival

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of the EMS sector is not its priority, resulting in organisations like LMT
considering a change to move abroad (Boulton 2012).
3.1.4.1.2.Economy
Singapore has seen a decrease in electronic domestic and non-oil domestic
exports since 1988, the year Lucky MT moved to Singapore. However,
Singapore still relies on the EMS sector for economic growth, especially with
the sector employing a quarter of all of manufacturing labour force (Sector
Report 2004). Moreover, electronic exports are up 5.1% year-on-year in 2003,
with a bright outlook it is believed the governments aggressively pro-business
environment and excellent infrastructure for manufacturing, logistics, and
transportation, will continue to be an advantage in areas where labour costs
or proximity to customers are not central (Sector Report 2004: p.6).
3.1.4.1.3.Social
The Singaporean Government has admitted that Singapore cannot compete
in low-cost assembly operations; one aspect of this is the high wages (Sector
Report 2004). LMT is experiencing pressure for its customers to move abroad
because of the high wages. In 1988, wages were S$568 but have since raised
to S$3114 in 2000 (Sector Report 2004). Also, Singapore are experiencing a
shortage of skilled labour workforce; Infocomm Development Authority
suggests Singapore will need about 10,000 skilled IT workers per year to
sustain growth in the electronics sector, but will have to look abroad for
individuals (Sector Report 2004). Therefore, raising doubt on remaining within
Singapore as variable costs increase year-on-year.
3.1.4.1.4.Technology
Price compression coupled with the fast pace of technological change is a
challenge for Singapores electronics industry. It is costly to install and train for
the new technologies but more initially; it is harder for weaker firms to fund
R&D for these technologies. The variety of customer sectors hinder LMTs
ability to invest large sums of money to their customers as each sector may
require costly research and development for new technologies.
3.1.4.1.5.Environmental and Legislation
After 1st July 2006, European legislation requires the elimination of six
substances (including Pb) from electronic products, a law that is already
practiced in United States. These environmental legislations will impact LMT
as current equipment would need to be changed, as well as components
ordered, both of which will be costly. Furthermore, the current inventory stocks
at LMT will cause an issue if they are not utilised or sold within the next 6
months.

3.1.5.Decision Orders
Scherpereels (2006) decision taxonomy explores the application of
developed theories in complex real world situation as problem
characterisations can be used as a guide for future solution development.
Figure 7 (Scherpereel 2006) categorizes the issues discussed thus far in
conjunction with the methodology in the paper.

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The decision order framework enables organisations to identify decision

problems in order to find a course of action or solution to these problems,
however, as discussed in Scherpereel (2006: p.132) a criticism of this
framework is the implementation of the taxonomic classification is based on a
subjective description of the decision or problem.
Mr Hos unrealistic financial projections are of high-risk, however, the
classification is dependent on the decision-maker (problem-solver) using first,
second or third-order language (Scherpereel 2006: p.129). It is first-order
language used by JP when discussing the unrealistic projections, as Mr Hos
inability of financial modelling was known at the point of promotion, therefore
this first-order problem is understood. Similarly, TeleNets unpaid invoices
pose a medium-risk as Chadwick Murkowski (Appendix B) outlines he is
keen to pay outstanding invoices, however the concept of one of LMTs
biggest customers experiencing serious financial issues is high-risk and a
long-term issue; It is classified as a second-order problem because of the
language used. However, the unstable economy is complex, important, highrisk and long-term issue resulting it is classification of third-order problems.
3.1.5.1.Wicked and Tame Problems
Figure 7 (Scherpereel 2006) highlights the wicked problems in bold that
currently face LMT. Issues such as inventory and financial issues can be
solved by gathering and analysing data, however the wicked problems lack a
definitive solution. Upon analysis of the table it is apparent that the majority of
these issues involve personnel; Moreover, Hancock (2011) found that wicked
problems tend to involve a high level of behavioural complexity.
3.1.5.2.Crisis Action
JPs behaviour has changed over a period of time whereby his analytical
approach diluted he became unaware of TeleNets financial difficulty. Weick
(1988: p.306) suggests in crises people often dont know what the
appropriate action is until they take some action and see what happens.
Thus, actions determine the situation. Therefore, it is possible that JPs
change in behaviour, for example, is a reactant to the crises situation or it
could also be the action fuelling the crises situation.

3.2.Issue Evaluation
3.2.1.Categorisation and Prioritisation
Evaluation, categorisation and prioritisation are conducted to determine the
most appropriate recommendations for future strategy. Figure 8 displays the
list of issues categorised. Upon selection of three must be addressed issues:
TeleNet unpaid invoices,
JPs priorities/proposals are not reflective of current situation, and,
Erfde-Auto causing issues to production line
Apgar (2006: p.9) suggests, The usual way to prioritize a lot of projects is to
measure their expected returns or value. Therefore, Erfde-Auto issue to
production line should be number one, as this customer has high-value
financially, socially and proposed opportunities for growth. Furthermore, the
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issues to the production line could potentially affect LMTs reputation amongst
other current customers and future customers. TeleNets unpaid invoices
should be addressed second as this customer holds high-value in sales as
well as its contribution to LMTs profit. Finally, JPs priorities/proposals are a
document that can be altered at anytime, however the lack of clear direction
could suggest an issue with JPs personal outlook on LMT. Therefore, this is a
second order tame problem with short-term, static properties, suitable for third
place prioritisation.

3.2.2.Root Cause Analysis

As discussed previously, unusable inventory is causing an issue at LMT for a
variety of reasons yet to be identified clearly and coherently. Figure 9 displays
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the root-causes for this issue using a root-cause diagram that is used to
identify the proximal cause that, if were replaced, would allow the process to
work correctly (Okes 2008: p.21). Upon analysis of the unusable inventory at
LMT, the root causes identified are past financial benefit, customer financial
issues inflicted upon LMT, sector changes, sector conflicts and environmental
issues; of which ultimately have been driven by the desire to be less reliant on
previous JV Partners.

3.2.3.Risk Assessment
Stoneburner et al. (2002: p.8) define the risk-assessment process, as risk is
a function of the likelihood of a given threat-sources exercising a particular
potential vulnerability, and resulting impact of that adverse event on the
organization. Figure 10 isolates four key issues that LMT is currently facing
and the risk that those issues are posing followed by the impact, likelihood,
timing and priority.
The issue with the highest priority is the Erfde-Auto issues with production
lines, as it has the potential to affect LMT reputation, and the affects it may
have on other customers and their production lines. This issue has not been
formally addressed (medium-likelihood), but its impact will be high and will
occur in the short-term. The customer is also a potential growth opportunity
therefore the conclusion of this matter will directly impact their proposal.
Secondly, the current unrealistic budget and forecast is threating LMTs
projections to understand its situation of its future likelihood dependence on
JV Partners, possibility to move production abroad, and general financial
position. The wide range of risks this issue poses justifies its high-impact.

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However, without a new financial projection it is difficult to suggest the

likelihood of these risks happening but its impact will be medium-term due to
the projection ending in one year.
Singapores wages are threatening LMT as customers may/are interested in
moving production abroad in order to cut costs. Thus far, LMT has not lost its
customers for this reason, however, J&M and Erfde-Auto have proposed a
move, potentially suggesting a move abroad regardless of LMT decision,
therefore it has been categorised as medium-high-likelihood, likewise
medium-high-impact as a loss of customer, or setting up abroad will
negatively financially impact LMT. Neither customers has suggested a sense
of urgency around the issue therefore, this risk is likely to impact in the
medium-term consequently placed as third place priority.
Finally, LMTs dependence upon the previous JV Partners will have a negative
financial impact upon LMT due to the current circumstances of TeleNet
financial issues and MedTechs issue with its infusion pump. It has be placed
a the fourth priority regardless of the high-impact and high-likelihood of this
risk because of its comparison to the other isolated issues that display
urgency and potential for future growth.

3.2.4.SAFe Review
The complexity of issues facing LMT are threatening its future, however, it is
possible for the opportunities proposed to LMT to diffuse some of these
issues. One opportunity in particular seems to be favoured by JP is the
proposal by Erfde-Auto to move production to India, as he has placed his
reputation at risk for this customer that otherwise would not be suitable due to
the difference in services between the two. The SAFe review, proposed by
Johnson et al. (2011), is a tool used to approach such decisions from a
rational design perspective.

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Figure 11 (Johnson et al. 2011) displays the SAFe review. Whilst the proposal
addresses some constraints at LMT its acceptability is low and the feasibility
is yet to be fully determined. The model, however, fails to draw analysis upon
the constraints or risks that it may pose upon LMT; for example, one current
issue is the power the customers currently have. By moving to India as
proposed by Erfde-Auto the current power will increase and may also deter
the other current customers. It must also be considered the current issues that
Erfde-Auto is causing currently to production lines. The lack of legitimate
financial records, that do not include the costs of proposals, causes an issue
to determine if LMT can afford to move abroad.

4.0.Strategic Recommendations
Kinston and Algie (1989: p.127) found that crisis causes decision makers to
focus only on opportunities allowing immediate action, however, Appendix C
outlines recommendations addressing both tame and wicked problems of all
time-horizons that this paper identifies as key issues that the analysis has
showed need to be addressed regardless of the immediate action.
The issues created by Erfde-Auto to the production line have been identified
as the top priority as outlined previously it could impact LMTs reputation and
fraction relationships with existing customers, and determine if a move to
India is worthwhile. This short-term issue is a strategic goal according to the
SLC Method as it is within LMT means to solve this issue (Braybrooke and
Lindblom 1970).
LMT have previously considered the implementation of Pb-free equipment
with a mix of responses, however, the introduction of a company policy will
ensure LMT is complying to environmental standards, improve LMTs
reputation and reduce customers powers as identified in Porters Five Forces.

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The proposal to demote and employ a new VP-of-Finance is addressing both

the financial issues and the personnel challenges as Mr Ho from the offset of
his employment was identified as unable to financially model a skill that has
prevailed itself as a necessity in this position.
Levinthal and Rerup (2006: p.503) suggest managers need to show a high
level of sensitivity to errors, unexpected events and to subtle cues
suggested by the organisations environment or its own processes; attributes
that JP is failing to show currently, it has been proposed that a consultant
executive coach will mentor JP to ensure he is more sensitive to the
organisation and all its aspects.
The proposed bonus scheme and salary review by JP has been dismissed
due to the nature of the other challenges currently facing LMT. It has been
suggested this will be reviewed within the fiscal year, in order to give the
organisation time to focus on other issues that are currently threatening the
organisation. JPs executive coaching will also give JP an opportunity to
review these proposals.
Furthermore, the dismissal of any movement abroad has been proposed as
the SAFe review outlined the availability and feasibility is not to a
recommended level. This will also give LMT an opportunity to review their
financial circumstances with the possibility of an independent move abroad to
another ASEAN country, reducing the power customers have and the financial
benefits of lower wage rates.

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6.0.Appendices List
6.1.Appendix A
JPs Priorities and Proposals (Boulton 2012)

6.2.Appendix B
Chadwick Murkowski Jr of Telecom Networks to Johnson Pang Email dated
09/10/05 (Boulton 2012)

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6.3.Appendix C
Report Recommendations Proposals and Priorities
Priority

Item

Proposal

Cost/Benefit

Issues to
production line

Complete an
assessment of the
issue and provide
facilities to
decrease risk

Save LMT reputation and

relationship with current
customers

Lead free
initiative

Introduce a
company policy for
all components and
equipment to be Pb
free

Demote Mr Ho, VP
of Finance
3

Mr Hos inability
to financially
model

Mr Hos inability
to financially
model

JPs inability to
fulfil his role

Outsource a new
VP of Finance

Introduce an
Executive Coach
consultant to
mentor JP in his
role

SD Bank:
Overdraft
increase and
new term loan

Increase overdraft
with Bank from $10
to $15m
Convert existing
outstanding loan of
$3.2 million to a
new loan of $10m

$40,000 for oven

Blanket policy for all
customers to conform
Satisfying
environmental issues
Reducing control of
customers
Keeping a loyal
employee
De-stressing Mr Ho
from the pressures of
that position
Reducing the risk of
future financial issues
Availability for
employment locally,
satisfying local
community
More accurate financial
projections
Improving JP as an
Managing Director
Easing the board that
JP is fully equipped to
fulfil his role
Re-directing JP for
more positive outcomes

Only c$300k p.a. (interest

rates still low paid for in
increased sales
To cover short term
working capital
requirements
Fund any future
opportunities or
proposals on this list

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BUSM3031-001-11000230

Take action for

the
responsibility of
ordering $4m
worth of
components
without an
authorised
order
TeleNet: late
invoices and
component
costs

Unusable
inventory

Issue Bernie Chen

with a formal
warning

To satisfy shareholders
To clarify the impact
his actions have on the
organisation

Communicate with
Chadwick
Murkowski of
TeleNet will give the
$500,000 worth of
components,
without discount

Reducing dependence
Utilise it as
compensation for late
invoices
Reducing the power of
customers

Bulk buy inventory

for customers
contributing 15%+
in revenue for
maximum 6 months

10

Lau Su-Min
lack of
contribution

Introduce an Board
Coach consultant

Maximise performance

Focus and improve

relationship with
J&M and DMS
(medical sector
customers) to
increase revenue,
reducing the
financial impact of
MedTech sales fall

Reducing dependence upon

JV partners

11

MedTech sales
fall

Dismiss

12

Erfde Auto and

J&M: Proposal
to move abroad
Singapore high
wage rates

Upon financial
review of new VP of
Finance, look at the
possibility to move
part of production
to another ASEAN
country, inviting
customers

13

Decreasing chances of
unusable inventory in
future
Reducing cost of
inventories
Reducing risk

Reduce power of
customers
Reduce dependence
upon JV Partners
Financial benefit of
lower wage rates
Potential new
customers

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BUSM3031-001-11000230

14

CEO & VP
Bonus Scheme

Dismiss. Review
within the fiscal
year.

15

Staff Salary
Review

Dismiss. Review
within the fiscal
year.

26